Cost-shifting to cost NSW councils $670m a year

COUNCIL coffers on the North Coast are being bled dry as State and Federal Governments pile on new duties without reaching into their own pockets.

Local Government NSW has identified $670 million in costs passed on to councils in 2013-14.

The practice involves one sphere of government offloading its services, assets or responsibilities onto another without providing the funds needed to support the shift.

Analysis of 72 local governments found Clarence Valley Council faced $7 million in extra expenditure in 2013-14 because of cost shifting - 6.55% of its total budget.

Lismore picked up a $6 million bill (6.69%), Coffs Harbour had $5.1 million (3.78%) and Ballina forked out an extra $3.2 million (4.66%).

The sample study did not include figures for Byron, Kyogle, Tweed or Richmond Valley councils.

The long list of cost-shifting categories included increased contributions to emergency services, higher road safety costs because of funding withdrawals and rates rebates for pensioners.

NSW is the only state that requires councils to fund half the cost of mandatory pensioner concessions.

The LGNSW study found the cost-shifting burden for councils around the state had increased $88 million since the last survey two years earlier.

"One of the greatest ironies is that we're able to quantify this figure on the same day that the NSW Government is off arguing against federal-state cost-shifting at the Council of Australian Governments," LGNSW president Keith Rhoades said.

"It certainly seems that what is good for the goose is not good for the gander in this case.

"These latest cost-shifting figures come hard on the heels of the IPART announcement of the tiny 1.8% rate cap, and illustrate the ever-increasing financial squeeze on councils in NSW."

Cr Rhoades said there had been a "triple whammy" of a 1.8% rate peg, more than $670 million in annual cost-shifting and a freeze on federal funding assistance grants costing NSW councils $289 million.

"So it's more than a bit rich that councils - even the majority who met the financial benchmarks set by the NSW Government - have been unfairly labelled not fit for the future and are set to be forcibly amalgamated," he said.

"It's not the councils that are broken, it's the funding system they're forced to work under."

LGNSW is standing by its opposition to forced mergers, at least until funding issues have been fixed.

"Amalgamating two financially squeezed councils just results in one large council under even greater financial stress," Cr Rhoades said.


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